• Iran has stopped all indirect communication with Washington as Iran forces are planning to completely block the Strait of Hormuz. Trump says this is false. Oil surged 4% to 92.00 per barrel post the news.
• US Equity Indices have hit all-time highs as the President says negotiations are still ongoing. Trump post on social media- “its time to make a deal”.
• Markets are modestly “risk on” with the news above suggesting engagement between the US and Iran is diplomatic.
• Bank of England’s Greene was on the wires saying “the risk of acting is less severe than the risk of failing to act”. Markets have priced in a 50% chance of a rate hike at the central banks July 30 meeting.
• ECB’s Rehn says a June hike by the European Central Bank would be an “insurance” hike.
• The New Zealand Dollar (NZD) has been the strongest performer last week on the main board while the Japanese Yen (JPY) was the worst performer.
Prospects of a US/Iran deal in the Strait of Hormuz has markets in a relatively positive mood early Tuesday, although the New Zealand Dollar (NZD) has struggled to push higher off the weekly close at 0.5980 against the US Dollar (USD) falling back to 0.5925 as hopes for a breakthrough remain high. Decent US Manufacturing data might be underpinning the greenback with figures out suggesting the sector grew in May the 9th consecutive month indicating business expansion. We look ahead to US Non-Farm Payroll releasing Friday where numbers could print soft. In the meantime, the kiwi could just chop around current levels.
Current Level: 0.5920
Support: 0.5830
Resistance: 0.5900
Last week's range: 0.5827- 0.5993
The kiwi has well and truly broken the topside of the bear channel we have been watching for months. The New Zealand Dollar (NZD), Australian Dollar (AUD) cross closed the week circa 0.8340 (1.1990) but has given back gains into Tuesday trade to 0.8250 (1.2120) with the NZD under modest pressure. Aussie GDP prints today for quarter 1 and should represent solid growth of around 0.5% q/q however, over the past couple of days this has been revised down to around 0.2% which could send the y/y figure lower to circa 2.4% instead of the forecasted 2.6% y/y and put significant pressures on the AUD.
Current Level: 0.8253
Support: 0.8135
Resistance: 0.8375
Last week's range: 0.8141-0.8341
Current Level: (1.2111)
Support: (1.1940)
Resistance: (1.2290)
Last week's range: (1.1988-1.2283)
Prices in the New Zealand Dollar (NZD), British Pound (GBP) travelled to 0.4455 (2.2440) prior to the weekly close, just shy of the 2026 high in the cross. The kiwi hasn’t been able to hold this level Monday giving back gains to 0.4405 (2.2700) at the end of the NY session Tuesday. Profit taking perhaps or just an overbought NZD. Bank of England’s (BoE) Bailey spoke this morning saying he was caught between rising inflation and soft growth, the general forecast is for lower growth and not for a recession. Geopolitical risks this week could support the NZD.
Current Level: 0.4399
Support: 0.4310
Resistance: 0.4465
Last week's range: 0.4335-0.4455
Current Level: (2.2732)
Support: (2.2400)
Resistance: (2.3200)
Last week's range: (2.2442-2.3068)
The New Zealand Dollar (NZD) clocked the highest level since July 2025 late last week against the Euro (EUR) reaching 0.5145 (1.9440) the biggest weekly surge by the kiwi in some time. However, the NZD wasn’t able to hold this zone giving back gains to 0.5090 (1.9650) this morning. The ECB should remain on a tightening bias for a while with inflationary impacts of elevated energy prices linked to the Middle East tensions elevated. This may underpin the EUR until we see a fundamental change.
Current Level: 0.5094
Support: 0.5020
Resistance: 0.5140
Last week's range: 0.5017-0.5142
Current Level: (1.9630)
Support: (1.9460)
Resistance:(1.9930)
Last week's range: (1.9444-1.9932)
The Australian Dollar (AUD) opened around 0.7180 against the US Dollar (USD) Monday shifting immediately lower to 0.7130 before settling around 0.7170 levels into Tuesday’s NY close. Investors have been re-pricing the AUD after assessing the domestic growth outlook (GDP) later today. First quarter GDP is predicted to release softer than the current account report showing the deficit widening to AUD 27B reconfirming concerns around momentum is slowing. Its clear the RBA earlier hikes are beginning to hit home; however, the AUD should remain buoyant given the RBA’s hawkish tone.
Current Level: 0.7171
Support: 0.7050
Resistance: 0.7250
Last week's range: 0.7096- 0.7199
Sideways action in the Australian Dollar (AUD), British Pound (GBP) cross is the ongoing theme with price pivoting around the 0.5330 (1.8760) area this week. The main economic data attraction is Australian GDP q/q which prints later today, this is predicted to come in lower than the 0.5% after repricing over the last 48 hours with softer domestic demand and flat housing prices. Bailey talks Friday. We think a retest of the zone around 0.5290 (1.8900) could eventuate.
Current Level: 0.5329
Support: 0.5280
Resistance: 0.5390
Last week's range: 0.52302-0.5350
Current Level: (1.8765)
Support: (1.8550)
Resistance: (1.8940)
Last week's range: (1.8690-1.8858)
The Australian Dollar (AUD) trades just shy of the long term high against the Euro (EUR) in early Tuesday sessions at 0.6175 (1.6190), the Aussie extending moves off the weekly close from last week’s 0.6130 (1.6320). The ECB hawkish shift in rate hike expectations with increased inflationary impacts could support the EUR for a while especially if Australian inflation continues to ease. Watch for a potential kick back to 0.6100 (1.6400) levels in the medium term.
Current Level: 0.6171
Support: 0.6100
Resistance: 0.6205
Last week's range: 0.6123-0.6171
Current Level: (1.6204)
Support: (1.6120)
Resistance: (1.6400)
Last week's range: (1.6203-1.6331)
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